Germany to Seed Fund Namibia's First Microfinance Banking Institution
Vries, D.

The German government has provided seed capital amounting to EUR2.3 million (US$3.3 million) to establish the first formal microfinance bank in Namibia. The new bank will be founded on the successful pilot project, Koshi Yomuti, established in 2002 with the support of the German Technical Co-operation Agency (GTZ). The project serves about 5,500 clients in remote areas, of which ninety two percent are women.

The Namibian Government and KfW, on behalf of the German government, signed the funding agreement for the new Micro-Finance bank, last week. Initially the Micro-Finance Bank will be wholly owned by foreign investors, but over time local investors would be allowed to participate.

Matthias Hansen, the Chargé d'Affaires of the German Embassy in Windhoek, said the establishment of the bank "forms part of a much broader financial sector development programme aimed at widening and deepening the Namibian financial sector. Adequate access to financial services is of central importance to foster broad-based social and economic development and thereby to sustain social stability." The majority of Namibians, Hansen continued, did not have access to financial services offered by the country's mainstream banking sector, which is an obstacle to the "development of micro-, small- and medium-sized enterprises and hence the development of a dynamic and diversified private sector within the Namibian economy."

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